Document Content

DECREE No

DECREE No.49/2000/ND-CP OF SEPTEMBER 12, 2000 ON ORGANIZATION AND OPERATION OF COMMERCIAL BANKS

THE GOVERNMENT

Pursuant to the Law on Organization of the Government of September 30, 1992;

Pursuant to Credit Institutions Law No.02/1997/QH10 of December 12, 1997;

At the proposal of the Governor of the State Bank of Vietnam,

DECREES:

Chapter I

GENERAL PROVISIONS

Article 1.-

1. This Decree details a number of articles of the Law on Credit Institutions regarding the organization and operation of commercial banks.

2. Commercial banks are those allowed to conduct all banking operations and other related business activities for profit-making purpose, thus contributing to the attainment of the economic objectives set by the State.

3. Commercial banks prescribed by this Decree include State commercial banks and joint stock commercial banks of the State and the people.

Article 2.- The granting of establishment and operation licenses; and the organizational structure of commercial banks shall comply with the provisions of Section 1, Section 2, Chapter II of the Law on Credit Institutions and the State Bank�s regulations.

Chapter II

OPERATIONS OF COMMERCIAL BANKS

Section 1. CAPITAL MOBILIZATION

Article 3.- Commercial banks are allowed to mobilize capital in the following forms:

1. Receiving money deposited by organizations, individuals and other credit institutions in forms of demand deposit, time deposit and other kinds of deposit.

2. Issuing deposit certificates, bonds and other valuable papers to mobilize capital from organizations and individuals at home and abroad after obtaining the State Bank Governor�s approval.

3. Borrowing capital from other credit institutions operating in Vietnam and foreign credit institutions.

4. Borrowing short-term loans from the State Bank according to the provisions of Clause 1, Article 30 of the Law on the State Bank of Vietnam.

5. Other forms of capital mobilization according to the State Bank�s regulations.

Section 2. CREDIT OPERATIONS

Article 4.- Commercial banks are allowed to supply credit to organizations and individuals in forms of loans, discount of commercial bills and other valuable papers, guarantees, financial leasing and other forms specified by the State Bank.

Article 5.- Commercial banks are allowed to lend capital to organizations and individuals in the following forms:

1. Short-term loans to meet the demand of capital for production, business, service and daily life activities.

2. Medium-term and long-term loans for execution of projects for investment in development of production, business, services and life improvement.

Article 6.-

1. Commercial banks shall take initiative in seeking production and/or business projects, which are feasible, efficient and capable of repaying debts, to provide loans.

2. The State commercial banks shall provide loans under the Prime Minister�s decisions in case of necessity.

3. The lending must be effected in written credit contracts and in compliance with the law provisions on security for loans and lending limits.

Article 7.-

1. Commercial banks shall organize the considera-tion and approval of the lending on the principle of clearly defining and assigning responsibilities for processes of lending evaluation and decision; and inspection and supervision of the capital borrowing and use and debt repayment by customers.

2. Commercial banks are allowed to request customers to supply documents evidencing their feasible business plans, the financial capabilities of their own and of their guarantors before deciding to lend; and to terminate the lending and recover debts ahead of time upon detecting the supply of untruthful information or breaches of credit contracts by customers.

3. Commercial banks are entitled to dispose borrowers� loan security property and guarantors� property in the performance of guaranty obligations in order to recover debts according to the provisions of the Government�s Decree on security for loans from credit institutions; and to initiate lawsuits against customers who breach credit contracts and guarantors who fail to perform or improperly perform their guaranty obligations according to the provisions of law.

4. Commercial banks are allowed to exempt or reduce lending interest rates and/or banking charges; reschedule debts; sell and purchase debts according to the State Bank�s regulations.

Article 8.-

1. Commercial banks are allowed to guarantee loans, payments, contract performance, bids, and provide other banking guarantee forms with their prestige and financial capabilities for the guarantees according to the State Bank�s regulations.

2. The guarantee level for a customer and the total guarantee level of a commercial bank must not exceed the proportion on its own capital as prescribed by the State Bank.

3. Commercial banks shall effect the guarantee of the rights and obligations provided for in Article 59 of the Law on Credit Institutions and other law provisions.

Article 9.- Only commercial banks licensed to conduct the international payment operations shall be allowed to provide guarantees for loans, payments and other banking guarantee forms whereby the guarantees are foreign organizations and/or individuals.

Article 10.- Commercial banks are allowed to:

1. Discount commercial bills and other short-term valuable papers for organizations and individuals.

2. Rediscount commercial bills and other short-term valuable papers for other credit institutions.

Article 11.- Commercial banks are allowed to conduct financial leasing activities, provided that they establish their own financial leasing companies. The establishment, organization and operation of financial leasing companies shall comply with the Government�s Decree on organization and operation of financial leasing companies.

Section 3. PAYMENT AND TREASURY SERVICES

Article 12.-

1. Commercial banks have to open deposit accounts at the State Bank (the State Bank�s transaction bureaus or provincial/municipal branches) of the localities, where such commercial banks are headquartered, and maintain the prescribed compulsory reserve deposit balance thereat. They are entitled to open deposit accounts at other banks at home according to the State Bank�s regulations.

2. Branches of commercial banks are entitled to open deposit accounts at the State Bank�s branches in provinces and cities where such branches� head offices are located.

3. Commercial banks are entitled to open accounts for their domestic and foreign customers.

Article 13.- Commercial banks are allowed to:

1. Supply payment instruments;

2. Provide domestic payment services for customers;

3. Provide services of entrusted collection and payment;

4. Provide other payment services according to the State Bank�s regulations;

5. Provide international payment services when so permitted by the State Bank.

6. Provide services of cash collection and dispensation for customers;

7. Organize the internal payment system and participate in the domestic inter-bank payment system. The participation in the international payment system must be permitted by the State Bank.

Section 4. OTHER OPERATIONS

Article 14.-

1. Commercial banks are allowed to use their charter capital and reserve funds to make capital contributions to or purchase stocks from other credit institutions at home according to the provisions of law. The level of capital contributed to or stocks purchased from one enterprise by each commercial bank, the total capital contributed to or stocks purchased from all concerned enterprises by each commercial bank must not exceed the maximum level prescribed by the State Bank.

2. The capital contribution by commercial banks to foreign credit institutions for establishment of joint-venture credit institutions in Vietnam shall comply with the Government�s regulations on organization and operation of foreign credit institutions in Vietnam.

3. Commercial banks� capital contribution, stock purchase and/or joint venture with foreign investors must be approved in writing by the State Bank and shall be effected according to the provisions of law.

Article 15.- Commercial banks are allowed to participate in the monetary market according to the State Bank�s regulations.

Article 16.- When permitted by the State Bank, commercial banks may directly trade in foreign exchange and gold on the domestic market and international market or set up their affiliated companies that have the legal person status and conduct independent cost-accounting with their own capital (hereinafter referred to as affiliated companies for short) to do such business.

Article 17.- Commercial banks may consign, undertake consignment or act as agents in banking operation-related domains, including the management of property and investment capital of organizations and individuals at home and abroad under consignment or agency contracts.

Article 18.- Commercial banks are allowed to provide insurance services; set up affiliated companies or establish joint ventures to conduct insurance business according to the provisions of law.

Article 19.- Commercial banks are allowed to provide the following services:

1. Giving financial and monetary consultations to customers by mode of directly giving consultations to customers or setting up affiliated companies therefor according to the provisions of law.

2. Preserving precious exhibits, valuable papers, hiring out of safes, pawn service and other services specified by law.

Article 20.- Commercial banks are not allowed to directly deal in real estates.

Article 21.- Commercial banks may directly conduct or set up affiliated companies to conduct other banking operation-related business activities according to the provisions of law.

Article 22.- In the course of operation, commercial banks shall have to abide by the regulations on limitations so as to ensure the safety in their operations according to the provisions of Section 5, Chapter III of the Law on Credit Institutions and the State Bank�s regulations.

Chapter III

ADMINISTRATION, MANAGEMENT AND CONTROL

Section 1. STATE COMMERCIAL BANKS

Article 23.- State commercial banks are those established by the State, which invests capital therein and organizes the management of business activities thereof, thus contributing to the attainment of the State�s economic objectives.

Article 24.- State commercial banks are administered by their Managing Boards. The Managing Board�s posts shall be appointed and dismissed by the State Bank Governor after consulting the Government Commission for Organization and Personnel.

Article 25.- Managing Board and Managing Board members

1. Each Managing Board shall have 5 or 7 members, including full-time members and part-time members. Part-time members must not be those currently holding leading posts in the State apparatus. The Managing Board�s membership, full-time members and part-time members of a commercial bank shall be stated in its charter.

2. The Managing Board Chairman, the Managing Board member who is concurrently the General Director, and the Managing Board member who is concurrently the Head of the Control Commission shall be full-time members.

3. The Managing Board members must be those having prestige, good professional ethics and knowledge of banking operations and must not be subjects specified in Article 40 of the Law on Credit Institutions.

4. The Chairman and other members of the Managing Board shall not be allowed to authorize persons who are not members of such Managing Board to perform their tasks or exercise their powers. The Managing Board Chairman must not join another Managing Board or take part in the management of other credit institutions, except for cases where such institutions are affiliated companies.

5. Term of office of the Managing Board members shall be 5 years. The Managing Board members may be re-appointed.

6. The Managing Board Chairman must not concurrently be the General Director or Deputy General Director, except otherwise provided for by law.

Article 26.- Tasks and powers of the Managing Board

1. To administer its bank according to the provisions of law and this Decree.

2. To receive capital sources and other resources assigned by the State.

3. To submit to the State Bank Governor:

a/ The amendments and/or supplements to the bank�s charter, for approval;

b/ The setting up of affiliated companies;

c/ The opening of transaction bureaus, branches, representatives in localities at home or abroad (hereinafter referred to as representative offices), and the establishment of public-service units of the bank, for approval;

d/ The capital contribution, stock purchase and/or joint venture with foreign investors, for approval;

e/ The division, split-up, amalgamation, merger, buy-out and/or dissolution of the bank and its transaction bureaus, branches, representative offices, affiliated companies and/or public-service units, for approval;

f/ Changes specified in Clause 1, Article 31 of the Law on Credit Institutions, for approval;

g/ The appointment and dismissal of the Managing Board�s Chairman and members, the General Director, Deputy General Director and/or Chief Accountant of the bank;

h/ The appointment and dismissal of the Head and members of the Control Commission, for approval;

i/ The independent audit organization to audit the bank�s operations, for approval.

4. To ratify the plan for allocation of capital and other resources to the affiliated companies.

5. To decide the contribution of capital to and/or purchase of stocks from enterprises and other credit institutions, except for the capital contribution, stock purchase and joint venture with foreign investors.

6. To approve the business operation plan and after-tax profit use plan proposed by the General Director.

7. To decide the appointment and/or dismissal of Directors of transaction bureaus, branches, representative offices and public-service units.

8. To decide the organizational structure of the managerial and executive apparatus at the bank�s head office; the organizational structure of the executive apparatus of transaction bureaus, branches, representative offices and public-service units; the regulation on employees, the regulation on wage payment and the regulation on commendation and discipline applicable within the bank.

9. To prescribe interest rates, exchange rates, commission rate, charges, fine levels applicable to customers according to the provisions of law.

10. To promulgate the Regulation on operation of transaction bureaus, branches, representative offices, public-service units and affiliated companies.

11. To promulgate the Regulation on operation of the Managing Board and the Control Commission.

12. To promulgate regulations on organization and activities of internal inspection and audit according to the provisions of law.

13. To adopt the annual general financial statements and final settlements of the bank.

14. To promulgate the documents concretely guiding the implementation of the State�s and the State Bank�s regulations on banking operations.

15. To exercise and perform other rights and tasks provided for by law and the bank�s charter.

Article 27.- Tasks of the Managing Board members

1. The Managing Board Chairman shall:

a/ Be responsible for all activities of the Managing Board, assign tasks to its members in the performance and exercise of tasks and powers of the Managing Board as specified in Article 26 of this Decree;

b/ Act on behalf of the Managing Board together with the General Director in signing the receipt of capital and other resources assigned by the State to the bank;

c/ Sign documents which are to be submitted by the Managing Board, within its competence, to the State Bank Governor and relevant bodies;

d/ Sign resolutions, decisions and documents or adopt documents under the Managing Board�s competence for implementation within the bank;

e/ Convene, preside over and assign the Managing Board�s members to prepare contents of the Managing Board�s meetings;

f/ Monitor and urge the performance of tasks by the Managing Board members during the intervals between two meetings of the Managing Board.

2. The tasks of other members of the Managing Board shall be assigned by the Managing Board Chairman suited to the bank�s operations and each member�s working conditions.

Article 28.- Apparatus assisting the Managing Board

1. The Managing Board shall use the bank�s managerial apparatus and seal for performance of its tasks.

2. The Managing Board shall set up an assisting section consisting of no more than 5 full-time officials. The Managing Board Chairman shall select and replace officials assisting the Managing Board.

3. The Managing Board shall set up the Control Commission according to the provisions of Articles 30 and 31 of this Decree.

Article 29.- Working regime of the Managing Board

1. The Managing Board shall work according to the collective regime; meet once every month to consider and decide matters falling under its competence and responsibilities. When necessary, the Managing Board may hold an extraordinary meeting to solve the bank�s imperative issues proposed by the Managing Board Chairman or the Control Commission Head or the General Director or over 50% of the number of the Managing Board members.

2. The Managing Board Chairman shall convene and preside over all meetings of the Managing Board. In case of his/her absence, the Chairman shall authorize another member in the Managing Board to convene and preside over a meeting.

3. A meeting of the Managing Board shall be considered valid when at least two thirds of its members are present. All Managing Board meeting documents must be sent to the Managing Board members and delegates invited to the meeting 5 days before the meeting date.

All meetings of the Managing Board must be recorded in minutes, which shall be signed by all participating members.

Resolutions and decisions of the Managing Board must be voted for by over 50% of the total number of the Managing Board members through a show of hands. In cases where the numbers of votes for and votes against are equal, the final decision shall rest with the Managing Board Chairman�s vote.

Those Managing Board members whose opinions are divergent from the Managing Board�s resolutions and/or decisions may reserve their opinions and report them to the competent State bodies. Pending such competent bodies� decisions, they shall still have to abide by the Managing Board�s resolutions and/or decisions. The reserved opinions shall be made in writing with the reservers� signatures and archived together with the relevant resolutions and decisions of the meetings.

4. The Managing Board, when meeting to discuss matters which are related to the State management functions of ministries, branches and administrations of the provinces and cities, shall have to invite competent representatives of the concerned ministries, branches and local administrations to participate in the meeting. If the matters are related to the interests and obligations of laborers in the bank, the branch trade union�s representatives must be invited to participate in the meeting. The above-said agencies� and organizations� representatives invited to participate in the meeting may address such meeting but shall not participate in voting.

5. The Managing Board�s resolutions and decisions are binding on the entire bank.

6. The bank�s General Director, the Directors of transaction bureaus, branches, public-service units and/or affiliated companies shall have to adequately and promptly supply necessary information related to the bank�s operation at the Managing Board�s requests.

7. The Managing Board members shall have to protect the confidentiality of the information supplied to them.

8. Operation expenditures of the Managing Board and the Control Commission, including the wages and allowances for members of the Managing Board and the Control Commission and the Managing Board�s assisting apparatus shall be accounted into the bank�s management costs. The General Director shall ensure the necessary working conditions and facilities for the Managing Board and the Control Commission.

Article 30.- Appointment, dismissal and approval of posts of the Control Commission

1. The Head of the Control Commission shall be a member of the Managing Board and posted by the latter.

2. Other members of the Control Commission shall be appointed and dismissed by the Managing Board.

3. The posting of the Control Commission Head and the appointment and dismissal of other members of the Control Commission must be approved by the State Bank Governor.

Article 31.- The Control Commission members

1. The Control Commission members must be persons having professional qualifications and ethics under the State Bank�s regulations, and must not be subjects specified in Article 40 of the Law on Credit Institutions.

2. The Control Commission shall have a minimum membership of 5, of which at least a half must be full-time members. Of the part-time members, one must be recommended by the Finance Minister, another by the State Bank Governor. The number of the Control Commission members shall be decided by the Managing Board.

Article 32.- Tasks and powers of the Control Commission

1. To inspect the bank�s financial operations; to supervise the observance of the cost-accounting regime, the operation of the bank�s internal inspection and audit system.

2. To evaluate the bank�s annual financial statements; to scrutinize each specific matter related to the bank�s financial operations when it deems necessary or under the Managing Board�s decisions.

3. To regularly notify the Managing Board of the results of financial operations.

4. To report to the Managing Board on the accuracy, truthfulness and legality of the recording and keeping of vouchers and the making of accounting books and financial statements of the bank, as well as the operation of the bank�s internal inspection and audit system.

5. To propose measures to supplement, modify and/or improve the bank�s financial operations according to the provisions of law.

6. To use the bank�s internal inspection and audit system for the performance of its tasks.

7. Other tasks and powers as prescribed by law and the bank�s charter.

Article 33.- Appointment and dismissal of the General Director, the Deputy General Director and the Chief Accountant

The State Bank Governor shall appoint and dismiss the General Director and the Deputy General Directors at the Managing Board�s requests; appoint and dismiss the Chief Accountant at the Managing Board�s requests and after obtaining the Finance Ministry�s consent.

Article 34.- The General Director and Deputy General Directors must not be subjects specified in Article 40 of the Law on Credit Institutions, must have professional qualifications and capacities to manage a credit institution according to the State Bank�s regulations, and reside in Vietnam during their terms of office.

Article 35.-

1. The bank�s operation shall be managed by the General Director, who shall be assisted by a number of Deputy General Directors, the Chief Accountant and a professional apparatus.

2. The General Director shall be answerable to the Managing Board and held responsible before law for the management of the bank�s daily operation according to the tasks and powers prescribed in Article 36 of this Decree.

3. The Deputy General Directors shall assist the General Director in managing one or several fields of the bank�s operation under the General Director�s assignment and shall be responsible to the General Director and law for the tasks assigned by the General Director.

4. The Chief Accountant shall assist the General Director in directing the bank�s accounting and statistical work, and have the rights and duties provided for by law.

5. The professional apparatus shall have the advisory function, assisting the Managing Board and the General Director in managing and administering the works.

Article 36.- Tasks and powers of the General Director

1. To sign, together with the Managing Board Chairman, the reception of capital and other resources assigned by the State for management and use according to the bank�s charter. To allocate capital and other resources to the affiliated companies.

2. To propose to the Managing Board:

a/ Amendments and/or supplements to the bank�s charter;

b/ The setting up of affiliated companies;

c/ The opening of transaction bureaus, branches, representative offices and public-service units;

d/ The organizational structure of the managerial and executive apparatus at the head office; the organizational structure of the executive apparatus of the transaction bureaus, branches, representative offices and public-service units;

e/ The appointment and dismissal of the Deputy General Directors, the Chief Accountant, the Directors of the transaction bureaus, branches, representative offices and public-service units according to provisions of the bank�s charter;

f/ The regulations on operation of the transaction bureaus, branches, representative offices and public-service units;

g/ Business operation plan and after-tax profit use plan;

h/ Interest rates, exchange rates, commission rates, charges, fine levels applicable to customers, for decision according to the provisions of law;

i/ The contribution of capital to and purchase of stocks from enterprises and other credit institutions;

j/ The division, split-up, amalgamation, merger, buy-out, dissolution of the bank and its transaction bureaus, branches, representative offices, affiliated companies and public-service units;

k/ Changes specified in Clause 1, Article 31 of the Law on Credit Institutions;

l/ Selection of independent audit organization(s) to audit the bank�s operations;

m/ Annual general financial statements and final settlements of the bank;

n/ Specific guidance on the implementation of the State�s and the State Bank�s regulations on banking operations.

3. To appoint and dismiss heads and deputy heads of professional sections or divisions, deputy directors, heads of accountancy sections, heads of internal inspection teams of transaction bureaus, branches, representative offices, public-service units and other posts as prescribed by the bank�s charter.

4. To organize the implementation of the business operation plan and after-tax profit use plan as soon as such plans are approved by the Managing Board.

5. To administer and decide on matters related to the bank�s business operations strictly according to law, the bank�s charter and the Managing Board�s decisions; to take responsibility for the bank�s business results.

6. To represent the bank in international relations, litigation, settlement of disputes, dissolution and/or bankruptcy.

7. To decide on the application of measures which are beyond his/her competence in emergency cases (natural calamities, enemy sabotage, fire, unexpected incidents) and take responsibility for such decisions, then promptly report such to the Managing Board, the State Bank and other competent State bodies for further solution.

8. To submit to the inspection and supervision by the Managing Board, the Control Commission, the State Bank and other competent State bodies regarding his/her performance of the managing tasks.

9. To report to the Managing Board, the State Bank and other competent State bodies defined by law on the bank�s business operation results.

10. Other rights and duties prescribed by law, the bank�s charter and the Managing Board�s decisions.

Section 2. JOINT STOCK COMMERCIAL BANKS

Article 37.-

1. Joint stock commercial banks of the State and the people (hereinafter referred to as joint stock commercial banks) are those established in the form of joint stock companies, to which State enterprises, State credit institutions and other organizations and individuals jointly contribute capital under the State Bank�s regulations.

2. Limits of stocks owned by one organization or individual as well as the transfer of stocks shall comply with the State Bank�s regulations.

3. The contribution of capital to and purchase of stocks from joint stock commercial banks by State enterprises and State credit institutions shall comply with the State Bank�s regulations.

Articles 38.- Types of stocks

1. Joint stock commercial banks must have common stocks. Owners of common stocks are called common stockholders.

2. Joint stock commercial banks may have preferred voting stocks. Owners of preferred voting stocks are called preferred voting stockholders.

3. Only founding stockholders are entitled to hold preferred voting stocks. The preferred voting right of founding stockholders shall be valid for only 3 (three) years from the date the bank is granted the business registration certificate. Past that time limit, the preferred voting stocks of the founding stockholders shall be converted into common stocks.

4. Common stocks cannot be converted into preferred voting stocks.

Article 39.- Preferred voting stocks and rights of preferred voting stockholders

1. Preferred voting stocks are those having more votes than common stocks. The number of votes of one preferred voting stock shall be prescribed by the bank�s charter.

2. Stockholders who own preferred voting stocks shall have the rights:

a/ To vote on issues falling under the competence of the Stockholders� Congress with the number of votes prescribed in Clause 1 of this Article;

b/ Other rights like common stockholders, except for cases specified in Clause 3 of this Article.

3. Stockholders owning preferred voting stocks must not transfer such stocks to other persons.

Article 40.-

1. Rights of common stockholders:

a/ To participate in and vote on all issues falling under the competence of the Stockholders� Congress; to stand for election and nominate members of the Managing Board and the Control Commission. Each common stock has one vote;

b/ To receive dividends at the levels decided by the Stockholders� Congress;

c/ To be given priority in purchasing new stocks according to the bank�s charter;

d/ To transfer stocks according to the bank�s charter;

e/ To receive information on the bank�s operation situation according to the bank�s charter;

f/ To severally authorize in writing other persons to personally participate in the Stockholders� Congress according to the provisions of the bank�s charter. The authorized persons shall not be allowed to stand for election in their own capacity;

g/ When the bank is dissolved or goes bankrupt, they shall receive part of the remaining assets in proportion to their capital amounts contributed to the bank according to the provisions of the legislation on dissolution and bankruptcy;

h/ Other rights provided for by the bank�s charter.

2. Major stockholders who have held stocks continuously for a period of at least 6 months shall have the rights:

a/ To nominate their representatives to the Managing Board and the Control Commission;

b/ To get access to and receive the copy or extract of the list of stockholders who have the right to participate in meetings of the Stockholders� Congress;

c/ To request the convention of the Stockholders� Congress;

d/ Other rights prescribed by the bank�s charter.

Article 41.- Obligations of common stockholders

1. To purchase stocks in full volume they have subscribed to.

2. To abide by the bank�s charter and internal management mechanisms.

3. To abide by the decisions of the Stockholders� Congress and the Managing Board.

4. To be liable for debts and other property obligations of the bank within the amount of capital they have contributed to the bank.

5. To perform other obligations as prescribed by the bank�s charter.

Article 42.- Founding stockholders

1. For the first three years after the bank is granted the business registration certificate, the founding stockholders shall have to jointly hold at least 20% of the volume of common stocks offered for sale. Common stocks of founding stockholders may be transferred to persons other than the bank�s stockholders, if it is so approved by the Stockholders� Congress. Stockholders who intend to transfer their stocks shall not have the right to vote on the transfer of such stocks.

2. Past the said three-year time limit, the restrictions prescribed in Clause 1 of this Article on common stocks of founding stockholders shall all be lifted.

Article 43.- Shares

1. Shares are certificates issued by joint stock commercial banks to certify the ownership over one or a number of stocks of such banks. Shares may be issued in form of registered or bearer ones. The principal content of shares is prescribed in Article 59 of the Law on Enterprises.

2. The issuance of shares shall comply with the State Bank�s regulations.

3. The issuance of shares to the public through the securities market must comply with the provisions of the legislation on securities and securities market.

4. The sale of stocks to foreign organizations and individuals shall comply with the provisions of law.

Article 44.- Stockholders� Congress

1. The Stockholders� Congress is the highest decision-making body of a joint stock commercial bank.

2. The Stockholders� Congress shall have the law-prescribed powers and tasks:

a/ To amend and supplement the bank�s charter;

b/ To discuss and adopt the Managing Board�s operation reports, the business results, financial final settlements, plans for distribution of profits, sharing of dividends and deduction for setting up and use of various funds at the Managing Board�s requests; as well as the orientations and tasks of the new fiscal year;

c/ To discuss and adopt the Control Commission�s operation reports;

d/ To set up affiliated companies;

e/ To divide, split up, amalgamate, merge, buy out, dissolve the bank and its affiliated companies;

f/ To decide the organizational structure of the managerial and executive apparatus of the bank; the regulation on staff members, staff payroll, wage fund and remuneration for members of the Managing Board and the Control Commission;

g/ To decide on plans for external activities;

h/ To decide on plans for building of material foundation and technical facilities;

i/ To adopt plans for contribution of capital to and/or purchase of stocks from enterprises and/or other credit institutions;

j/ To issue new shares;

k/ To transfer common stocks of the founding stockholders within the first three years from the date the bank is granted business registration certificate;

l/ To decide on changes specified in Clause 1, Article 31 of the Law on Credit Institutions, except for changes to the location of transaction bureaus, branches, representative offices, transfer of registered stocks in excess of the rates prescribed by the State Bank as well as change of the bank�s General Director (Director);

m/ To decide on measures to overcome the bank�s major financial changes;

n/ To elect, release from office, dismiss members of the Managing Board and the Control Commission;

o/ To examine faults and violations and decide on handling measures against the Managing Board�s members who have caused damage to the bank and its stockholders;

p/ Other rights and tasks as provided for by law and the bank�s charter.

3. The competence to convene a meeting of the Stockholders� Congress; the list of stockholders allowed to participate in the meeting; the invitation of meeting participants; the right to participate in the meeting; the agenda and content of the meeting; the conditions and mode for conducting the meeting; the adoption of decisions; the meeting minutes, and the request for cancellation of decisions of the Stockholders� Congress, shall all comply with the State Bank�s regulations and must be stipulated in the bank�s charter.

Article 45.- The tasks and powers of the Managing Board

1. To administer the bank according to the provisions of law and this Decree.

2. To decide on matters related to the bank�s objectives and interests, except for those falling under the competence of the Stockholders� Congress.

3. To be answerable to the Stockholders� Congress for its operation results as well as its errors and violations in managerial activities, breaches of the charter and law, which cause damage to the bank.

4. To propose to the Stockholders� Congress for decision the contents specified at Points a, b, d, e, f, g, h, i, j, l, m, n, o and p, Clause 2, Article 44 of this Decree.

5. To submit to the State Bank Governor for approval:

a/ Amendments and/or supplements to the bank�s charter;

b/ The setting up of affiliated companies;

c/ The opening of the bank�s transaction bureaus, branches, representative offices and public-service units;

d/ The capital contribution, stock purchase and/or joint venture with foreign investors;

e/ The division, split-up, amalgamation, merger, buy-out and/or dissolution of the bank and its transaction bureaus, branches, representative offices, affiliated companies and public-service units;

f/ Changes specified in Clause 1, Article 31 of the Law on Credit Institutions;

g/ The issuance of new shares;

h/ The election, appointment, dismissal and/or release from office of the Chairman and other members of the Managing Board; the Head and other members of the Control Commission, the General Director (Director);

i/ The selection of independent audit organization to audit the bank�s operations.

6. To decide on the organizational structure of the executive apparatus of transaction bureaus, branches, representative offices, public-service units and affiliated companies.

7. To ratify business operation plans proposed by the General Director (Director).

8. To prescribe the interest rates, exchange rates, commission rates, charges and fine levels applicable to customers according to the provisions of law.

9. To deduct, set up and use funds, and divide stock dividends under the resolutions of the Stockholders� Congress.

10. To appoint, dismiss and/or release from office the General Director (Director), Deputy General Directors (Deputy Directors) and the Chief Accountant of the bank; the Directors of transaction bureaus, branches, representative offices and public-service units;

11. To compile regulations on the appointment, dismissal and release from office of managerial posts other than those specified in Clause 10 of this Article and inscribe them in the bank�s charter.

12. To promulgate the Regulation on operation of the Managing Board and the Control Commission.

13. To promulgate the regulation on organization and operation of internal inspection and audit system according to the provisions of law.

14. To promulgate the Regulation on operation of transaction bureaus, branches, representative offices, public-service units and affiliated companies.

15. To promulgate documents concretely guiding the implementation of the State�s and the State Bank�s regulations on banking operations.

16. To decide wages and rewards for the General Director (Director), Deputy General Directors (Deputy Directors).

17. To examine errors and violations committed by the General Director (Director), Deputy General Directors (Deputy Directors), which cause damage to the bank and take necessary measures to remedy such errors and violations.

18. Other rights and tasks as provided for by law and the bank�s charter.

Article 46.- The Managing Board members

1. The Managing Board members shall be persons with prestige, professional ethics and knowledge about banking operations and must not be the subjects specified in Article 40 of the Law on Credit Institutions.

2. The Chairman and other members of the Managing Board must not authorize persons who are not the Managing Board members to perform their tasks and exercise their powers. The Managing Board Chairman must not participate in managing boards or take part in the management of other credit institutions, except for cases where such institutions are affiliated companies of the bank.

3. The Managing Board must have a minimum membership of 3 persons, which, however, must not exceed 11 persons. The number of the Managing Board members shall be decided by the Stockholders� Congress.

4. The term of office of the Managing Board members shall be between 2 and 5 years, and concretely decided by the Stockholders� Congress. The Managing Board members may be re-elected.

5. The Managing Board Chairman may concurrently be the General Director (Director) according to provisions of the bank�s charter.

6. The tasks and powers of the Managing Board members shall be provided for by the State Bank.

Article 47.- The Managing Board�s assisting apparatus

1. The Managing Board shall use the bank�s executive apparatus and seal for the performance of its tasks.

2. The Managing Board shall have full-time assistants. It shall prescribe the number of assistants and tasks of each assistant.

Article 48.- Election, release from office, dismissal and approval of posts of the Managing Board

1. The Stockholders� Congress shall elect, relieve and dismiss the Managing Board members, with votes of stockholders representing at least 51% of the total number of votes of all stockholders present at the meeting. The specific rate and mode of voting shall be stipulated by the bank�s charter.

2. The Managing Board shall elect, relieve from office and/or dismiss its chairman. The mode of voting; the percentage of votes for on the total number of votes shall be prescribed by the bank�s charter.

3. The election, release from office and dismissal of the chairman and members of the Managing Board must be approved by the State Bank Governor.

Article 49.- Election, release from office, dismissal and approval of posts of the Control Commission

1. The Stockholders� Congress shall elect, relieve and dismiss the Control Commission members, with votes of stockholders representing at least 51% of the total number of votes of all stockholders present at the meeting. The specific rate and mode of voting shall be stipulated by the bank�s charter.

2. The Control Commission shall elect, relieve from office and/or dismiss its head. The mode of voting; the percentage of votes for on the total number of votes shall be prescribed by the bank�s charter.

3. The election, release from office and dismissal of the head and members of the Control Commission must be approved by the State Bank Governor.

Article 50.- The Control Commission members

1. The Control Commission members must be persons with professional qualifications and ethics according to the State Bank�s regulations, and must not be the subjects specified in Article 40 of the Law on Credit Institutions.

2. The Control Commission shall have a minimum membership of 3 persons, and at least half of the number of its members must be full-time ones. The Control Commission head must be a stockholder. The number of the Control Commission members shall be decided by the Stockholders� Congress.

Article 51.- Tasks and powers of the Control Commission

1. To inspect the bank�s financial operations; to supervise the observance of the cost-accounting regime and operation of the bank�s internal inspection and audit system.

2. To evaluate the bank�s annual financial statements; to examine each specific matter related to the bank�s financial operations when deeming it necessary or under the decisions of the Stockholders� Congress or at the major stockholders� requests.

3. To regularly inform the Managing Board of its operation result; to consult the Managing Board before submitting its reports, conclusions and petitions to the Stockholders� Congress.

4. To report to the Stockholders� Congress on the accuracy, truthfulness and legality of the recording and keeping of vouchers, and making of accounting books and financial statements; as well as the operation of the bank�s internal inspection and audit system.

5. To propose measures to supplement, modify and improve the bank�s financial operations according to the provisions of law.

6. To be entitled to use the bank�s inspection and audit system for the performance of its tasks.

7. Other tasks and powers provided for by law and the bank�s charter.

Article 52.- The appointment, release from office and dismissal of the General Director (Director)

1. The Managing Board shall appoint, relieve from office and dismiss the General Director (Director), Deputy General Directors (Deputy Directors) and the Chief Accountant.

2. The appointment, release from office and dismissal of the General Director (Director) must be approved by the State Bank Governor.

Article 53.- The General Director (Director) and the Deputy General Directors (Deputy Directors) must not be the subjects specified in Article 40 of the Law on Credit Institutions, must have professional qualifications and capacities for administering a credit institution according to the State Bank�s regulations, and reside in Vietnam during their terms of office.

Article 54.-

1. The bank�s operation shall be managed by the General Director (Director), who shall be assisted by a number of Deputy General Directors (Deputy Directors), the Chief Accountant and a professional apparatus.

2. The General Director (Director) shall be answerable to the Managing Board and held responsible before law for the management of the bank�s daily activities.

3. The Deputy General Directors (Deputy Directors) shall assist the General Director in managing one or several fields of the bank�s operation under the assignment by the General Director (Director) and shall be responsible to the General Director (Director) and the law for the tasks assigned by the General Director (Director).

4. The Chief Accountant shall assist the General Director in directing the bank�s accounting and statistical work, and have the rights and duties provided for by law.

5. The professional apparatus shall have the advisory function, assisting the Managing Board and the General Director (Director) in managing and administering the work.

Article 55.- Tasks and powers of the General Director (Director)

1. To propose to the Managing Board:

a/ Amendments and/or supplements to the bank�s charter;

b/ The setting up of affiliated companies;

c/ The opening of transaction bureaus, branches, representative offices and/or public-service units;

d/ The organizational structure of the managerial and executive apparatus at the head office; the organizational structure of the executive apparatus of the transaction bureaus, branches, representative offices and public-service units;

e/ The appointment, relieve from office and dismissal of the Deputy General Directors (Deputy Directors), the Chief Accountant, the Directors of the transaction bureaus, branches, representative offices and public-service units according to provisions of the bank�s charter;

f/ The Regulation on operation of the transaction bureaus, branches, representative offices, public-service units and affiliated companies;

g/ The decisions on interest rates, exchange rates, commission rates, charges, fine levels applicable to customers, according to provisions of law;

h/ The issuance of new shares;

i/ The business operation plans;

j/ The contribution of capital to and purchase of stocks from enterprises and other credit institutions;

k/ The division, split-up, amalgamation, merger, buy-out, dissolution of the bank and its transaction bureaus, branches, representative offices, affiliated companies and public-service units;

l/ Changes specified in Clause 1, Article 31 of the Law on Credit Institutions;

m/ Selection of independent audit organization(s) to audit its bank�s operations;

n/ Specific guidance on the implementation of the State�s and the State Bank�s regulations on banking operations.

2. To appoint, relieve from office and dismiss posts under its appointing competence provided for in the bank�s charter. The recruitment, discipline and relieve from work the bank�s staff members; the decision on wages and allowances for its employees, including managerial officials under his/her appointing competence shall strictly comply with law and the regulation promulgated by the Managing Board.

3. To organize the implementation of the business operation plans as soon as such plans are approved by the Managing Board.

4. To administer and decide on matters related to the bank�s business operations strictly according to law, the bank�s charter and the Managing Board�s decisions; to take responsibility for the bank�s business results.

5. To represent the bank in international relations, litigation, settlement of disputes, dissolution and/or bankruptcy.

6. To decide on the application of measures which are beyond his/her competence in emergency cases (natural calamities, enemy sabotage, fire, unexpected incidents) and take responsibility for such decisions, and later to promptly report such to the Managing Board, the State Bank and other competent State bodies for further solution.

7. To submit to the inspection and supervision by the Managing Board, the Control Commission, the State Bank and other competent State bodies regarding his/her performance of the managerial tasks.

8. To report to the Managing Board, the State Bank and other competent State bodies as specified by law on the bank�s business operation results.

9. Other rights and duties prescribed by law, the bank�s charter and the Managing Board�s decisions.

Chapter IV

THE INTERNAL INSPECTION AND AUDIT SYSTEM; AUDIT OF COMMERCIAL BANKS

Section 1. THE INTERNAL INSPECTION AND AUDIT SYSTEM

Article 56.- The internal inspection and audit system

1. A commercial bank shall have to establish a full-time internal inspection and audit system (hereinafter referred to as the internal inspection system) belonging to the managerial apparatus of the General Director (Director). The internal inspection system shall exist at the bank�s head office down to its transaction bureaus, branches, representative offices and affiliated companies to assist the General Director (Director) in smoothly, safely and lawfully managing all professional operations of the bank. Personnel involved in the internal inspection system shall not concurrently undertake other work of the commercial bank.

2. The full-time internal inspection system and the personnel engaged in such professional operation (internal inspectors) shall be independent in their activities from the bank�s professional sections, transaction bureaus, representative offices and affiliated companies, and entitled to independently make evaluations, conclusions and petitions in their inspecting and auditing activities.

Article 57.- Internal inspectors

Besides the criteria commonly applicable to banking employees, internal inspectors must fully meet the following criteria:

1. Having legal knowledge and being expert in work they undertake.

2. Having university degrees in banking, economics or accountancy-finance.

3. Having worked in the banking sector for at least three years.

Article 58.- Tasks of the internal inspection organization

1. To regularly inspect the observance of law, the State�s regulations and the internal regulations; to directly inspect the professional operations in all domains at the transaction bureaus, branches, representative offices and affiliated companies.

2. To audit the professional operations in each period and each domain in order to accurately evaluate the business operation results and financial status of the bank.

3. To promptly report to the General Director (Director), the Managing Board and the Control Commission on the results of the internal inspection and audit, and propose measures to remedy shortcomings and problems.

4. Other tasks prescribed by the bank�s charter and the General Director (Director).

Article 59.- Powers of the internal inspection organization

1. To request the professional sections and staff members personally engaged in professional operations to explain work they have done or are doing, and produce directing documents, vouchers and recording books and other relevant documents (when necessary) in their operations in service of inspecting or auditing activities.

2. To request the General Director (Director) to set up an inspection or re-inspection delegation to perform regular or irregular inspection and audit tasks.

3. The head of the inspection section at the head office or the heads of the inspection groups at the transaction bureaus, branches, representative offices and affiliated companies shall be entitled to participate in meetings convened by the General Director (Director).

4. To propose the General Director (Director) to handle according to his/her competence units and/or individuals that commit acts of violating laws and regulations of the State Bank and the bank.

5. Other powers as provided for by the bank�s charter and the General Director (Director).

Section 2. AUDIT OF COMMERCIAL BANKS

Article 60.- Within 30 days at most before the end of a fiscal year, the commercial bank shall have to select an audit organization other than the internal audit organization to audit its operations. Such an audit organization must be approved by the State Bank.

Article 61.- The audit of the bank�s operations shall be conducted in compliance with the provisions of the Law on Credit Institutions, the legislation on independent audit and the State Bank Governor�s guiding documents.

Chapter V

SPECIAL CONTROL

Article 62.- Reporting on solvency difficulties

Should any danger of losing its solvency to pay its customers appears, the commercial bank shall have to promptly report to the State Bank on its financial status, reasons therefor and remedial measures it has applied or is intended to apply.

Article 63.- Imposition of special control

1. The State Bank shall place a commercial bank under the special control when the latter is in danger of losing its paying capability or solvency.

2. The State Bank shall specify cases where it shall place commercial banks under the special control according to provisions of the Law on Credit Institutions and other relevant provisions of law.

3. In cases where a commercial bank is placed under the special control for the reason that it is in danger of losing its solvency, the State Bank shall have to work out a special control plan, then submit it to the Prime Minister for consideration and approval, and organize the implementation of the plan already approved by the Prime Minister.

Article 64.-

1. The State Bank Governor shall issue decisions to place a commercial bank under the special control and lift such special control according to provisions of the Law on Credit Institutions and special control plan already approved by the Prime Minister for cases where such commercial bank is in danger of losing solvency.

2. The tasks, powers and responsibilities of the special control commission; the responsibilities of banks placed under the special control shall comply with the provisions of the Law on Credit Institutions and guiding documents of the State Bank Governor.

3. In emergency cases, in order to ensure the capability to repay its customers� deposits, a commercial bank may be provided with special loans by the State Bank or other credit institutions. Such special loans shall be repaid prior to all other debts of the commercial bank. The loan provision and debt recovery shall comply with the State Bank�s regulations.

Chapter VI

IMPLEMENTATION PROVISIONS

Article 65.- This Decree takes effect 15 days after its signing. The previous stipulations contrary to this Decree are now all annulled.

The State Bank Governor shall have to guide the implementation of this Decree.

Article 66.- The ministers, the heads of the ministerial-level agencies, the heads of the agencies attached to the Government and the presidents of the People�s Committees of the provinces and centrally-run cities shall have to implement this Decree.

On behalf of the Government

Prime Minister
PHAN VAN KHAI